Meanwhile, the company expects the launch of its new Gemini 2.0 AI model to help drive growth as it moves closer to being a universal assistant. The model has more advanced multimodal and agentic capabilities and will also be used to power its AI Overviews within search. It said its consumer Gemini app is also gaining traction.

Alphabet shares fell 8% on Wednesday as investors balked at the Google parent's slowing cloud growth and planned $75 billion capital spending for the year, underscoring growing fears over Big Tech's escalating artificial intelligence costs.

Alphabet, parent company of search giant Google, said it will spend $75 billion in 2025 in the AI arms race, raising investor concerns.

Alphabet (GOOGL), the parent company of Google, has announced a $75 billion capital expenditure budget for 2025. This reflects a large increase

Key Takeaways Shares of Google parent Alphabet tumbled Wednesday amid worries about whether the tech giant's spending on AI will pay off. Several analysts lowered their price targets for the stock, citing concerns about the company's weaker-than-expected cloud growth and plans to ramp up spending on AI.

Alphabet was falling on Wednesday as it shocked the market with its heavy spending plan. Wall Street analysts say it can still show a return on investment.